Jeremy Corbyn slammed for dubbing City “pernicious and undemocratic”
Jeremy Corbyn has been slammed by City chiefs for attacking the “pernicious and undemocratic” influence of the financial services sector.
The Labour leader will today reignite his party’s war against the City, saying his party will make it “the servant of industry not the masters of us all.”
Speaking at a conference organised by manufacturing organisation The EEF, Corbyn will declare that it is time for “a fundamental rethink of whom finance should serve and how it should be regulated”, adding: “There can be no rebalancing of our distorted, sluggish and unequal economy without taking on the power finance.”
On the same day that Brexit secretary David Davis will commit to raising standards after leaving the EU, Corbyn will claim that “deregulated finance has progressively become more powerful”.
The Labour leader will say: “Its dominance over industry, obvious and destructive; its control of politics, pernicious and undemocratic.
“The size and power of finance created a generation of politicians who thought the City of London could power the whole economy. Out-of-control financial wizardry and gambling were left barely regulated, while the real economies in once strong industrial areas were put into managed decline…
“For a generation, instead of finance serving industry, politicians have served finance. We’ve seen where that ends: the productive economy, our public services and people’s lives being held hostage by a small number of too big to fail banks and casino financial institutions.”
Corbyn will pledge to make the next Labour government “the first in 40 years to stand up for the real economy”, damning the City’s “extractive “logic”. He will highlight the GkN takeover as an example where Labour would change laws so that government can intervene on hostile takeovers.
But the sector has fought back ahead of his speech.
Miles Celic, chief executive of TheCityUK, blasted Corbyn for failing “to grasp that the financial and related professional services industry is a national asset.
“It is more than the City of London, with strong financial centres right across the country in cities such as Manchester, Glasgow, Cardiff, Birmingham and Bristol. Two thirds of the 2.2 million jobs in the industry are outside the M25, as are over half its £95.7bn of exports. It is also the country’s largest taxpayer, contributing over £87bn towards funding our vital public services.
“As well as providing jobs and tax revenue, this industry helps people save for a mortgage, start a business, invest in new technologies or plan for retirement.
“As Britain leaves the EU, what we most urgently now need is clarity from all political parties on how they will promote and protect jobs through the best possible Brexit deal.”
This is far from the first time Labour has waged war against the City. Last autumn, Corbyn told bankers including Morgan Stanley they were right to consider the party a threat. Prior to that his shadow chancellor John McDonnell revealed the team was scenario planning for a run on the pound.
But the party oscillates in its relationship with banks. Recently McDonnell told City A.M. that he had “nothing but respect” for City firms that were adding value and providing taxes as he sought to reassure the sector about a prospective Labour government. He and his team have also been visiting several banks – including Morgan Stanley.